Stop losses ...ASX

[shasta]

Oops. :o

Lego Man got it in one, certainly was aimed at anyone.

Apologies for the misunderstanding :o

I'll go to the naughty mat for ten

[contrarianinvestor]

Over time the DOW would have to go up from 10,000 to over 100,000 to replicate the conditions Warren Buffett enjoyed. As i said, we won't ever have these.

Buffett's career spanned over 50 years. 10,000 at a compound gain of only 5% p.a. over 50 years will give 114,674. Seems feasible to me since the Dow gained more than 10% p.a. on average during the last century. I assume you are familiar with discounted cash flow calculations. (Here is the formula for those who are not.)

And now for the best part: 10,000 compounded at 10% over 50 years gives 1,173,909.

Einstein once said that "the most powerful force in the universe is compound interest". I tend to agree with that.

[ollie]

Interesting, and i;m firmly in the camp of the two previous posts. Earlier this year I took a 70% profit off an Ozzy miner in a day. I had bought the day before. Next following day , after a trading halt, due to a speeding ticket from ASX, it lost most of that gain. I was just lucky. Many times since i have taken profits off the same co: but mostly sold too early, hence missing more profit. I was what i call range trading, I knew the patern the s/p was taking and tried to buy the lows and sell the high's, hardly ever hitting either, but close enough to triple my original play money ( this year)

Today its s/p is $4.45 and i started trading it at $1.80 = nearly 250% profit for holders over that time, just about on a par with with me, with brokerage ?????

If this co: drops 50c on Monday, as it has done twice in the last week, (and recovered again),...... i will again be in like a robbers dog while the holders bite thier finger nails.

So i don't want to be WB, i just want to have some fun and profits and a stop loss i know will help ME from selling too early.

[Phaedrus]

I just want.... a stop loss I know will help ME from selling too early.

Ollie, Ollie, Ollie. Pay attention! That's not what they are for and not what they do!!!!!

A STOP LOSS is to stop you holding on to a stock that makes a significant fall after you have bought. If this condition is met, its aim is to make you sell early.

A TRAILING STOP trails behind a rising stockprice. Its aim is to lock in profits in the event of the price making a significant fall. If this condition is met, its purpose is to make you sell before you give all your profits back to the market.

The best way to avoid selling too early is to use Trend indicators.

[wbosher]

Ollie, Ollie, Ollie. Pay attention! That's not what they are for and not what they do!!!!!

Can't you just see Phaedrus in the front of a classroom, long ruler in hand, whacking it repeatedly on the desk in frustration?

Reminds me of a teacher I once knew a long, long time ago...

[sharer]

Can't you just see Phaedrus in the front of a classroom, long ruler in hand, whacking it repeatedly on the desk in frustration? ......

I've made many many mistakes, some of them biggies, but thank goodness for Phaedrus waving that metaphorical TA stick occasionally!!
I'm learning fast Phaedrus, rather be whacked by your Techie stick than get whacked even harder by that brutal Mr Market. Please don't give up on us just because of some embarrassed yelps.

[wbosher]

I agree. I have hinted (or actually said quite plainly) that Phaedrus should write a book. There are in fact several very helpful people on this forum that are willing to offer useful advice.

I'm glad I found this site!!

[ollie]

Hahahaha lol thanks Phaedrus, I'm only 61 and still very much in the learning curve, in some area's , quite a few actually.

I hear what your saying, thank you.

I know you could recommend a good read which covers this area.

Lucky for me smacking is outlawed in NZ

cheers

[wbosher]

Check these out ollie, this is just a couple that I've come across. There was another one about books but I can't seem to find it.

http://sharetrader.co.nz/showthread.php?t=6903
http://sharetrader.co.nz/showthread.php?t=6878

The second link isn't about books, it's more a case study on a particular stock. Interesting reading though.

[ollie]

Thanks wbosher,

if i get a dummies book i'll save it to read at home ( not on the train ) ..lol